The Use of Funds in Government Accounting

1.To what does basis of accounting refer?a.whether an entity is trying to measure the excess of inflows over outflows b.how much cash an entity received in a particular reporting period c.the timing of recognition of assets, liabilities, revenues, and expenditures/expenses in financial statements d.the ownership of the assets, liabilities, and equities reported in a balance sheet

Answer:c

2.Governmental accounting normally does nota.use separate funds to account for various activitiesb.incorporate budgetary accounts into the accounting systemc.measure the amount of profit earned during a fiscal yeard.focus on flows of current financial resources

Answer: c

3.In governmental accounting, a fund is best defined as:a.a sum of cash set aside to attain certain objectivesb.a fiscal entity that has both financial and capital resourcesc.a fiscal entity that has cash resources only d.a fiscal and accounting entity with a self-balancing set of accounts

Answer:d

4.Which of the following funds all use the current financial resources measurement focus?a.Debt Service Fund, Special Revenue Fund, and Capital Projects Fundb.General Fund, Debt Service Fund, and Internal Service Fundc.Debt Service Fund, Investment Trust Fund, and Capital Projects Fundd.General Fund, Debt Service Fund, and Pension Trust Fund

Answer:a

5.The three broad categories of funds used by governmental entities are:a.Governmental, Proprietary, and Fiduciaryb.Unrestricted, Partially Restricted, and Fully Restrictedc.General, Special, and Fiduciaryd.General, Enterprise, and Agency

Answer:a

6.Within a fund, which of the following results from using the current financial resources measurement focus?a.capital assets will be depreciatedb.property taxes will be recognized on the cash basis of accounting c.a liability must be reported for unsettled claims, provided payment ultimately will be made d.long-term assets and liabilities will not be recorded in the fund

Answer:d

7.Which of the following funds all use the economic resources measurement focus?a.Enterprise Fund, Special Revenue Fund, and General Fundb.Internal Service Fund, Pension Trust Fund, and Enterprise Fundc.Debt Service Fund, Internal Service Fund, and Pension Trust Fundd.Enterprise Fund, Internal Service Fund, and Capital Projects Fund

Answer:b

8.Which basis of accounting is used by funds that have a current financial resources measurement focus?a.full accrual basisb.cash basisc.modified accrual basisd.modified cash basis

10.The General Fund levies property taxes in the amount of $1,000,000 for calendar year 2009. It expects to collect $950,000 during the year, $30,000 in the first 60 days of the next year, and $15,000 during the rest of the next year. It does not expect to collect the remaining $5,000. How much property tax revenue should it recognize for the year 2009?

a.$1,000,000b.$980,000c.$995,000d.$990,000

Answer:b

11.Under modified accrual accounting, when are revenues considered to be "available?"a.when cash has been collectedb.when cash is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period c.when cash is on hand or reasonably expected to be collected at any time in the future so they can pay liabilities incurred in the...

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